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More Health for the Money the Health for More “This document will help contribute to the ongoing dialogue about improving efficiency in donor funding for health. It sheds light on possible solutions and addresses the inherent complexities these solutions present. More Health for the Money It will no doubt be of use as PEPFAR continues to advance its agenda on smart investments.” Its Partners and Fund Global the for Work to Putting Incentives Eric Goosby Putting Incentives to Work for the Global Fund and Its Partners U.S. Global AIDS Coordinator “This report sets a new agenda for health financing. It challenges funders—both government and global health partners—to take a fresh look at their investments and consider what can be done to achieve greater impact and improve health.” Donald Kaberuka President, African Development Bank “The approach outlined in this report calls for the full commitment and cooperation of global health funders to respect country specificity and for implementers to respect the principle of value for money at every step of service delivery.” Agnes Binagwaho Minister of Health, Rwanda “A value for money agenda for health financing could achieve significant health gains on the ground. Our global health financing institutions can better leverage their resources to attain the best possible health outcomes. Funders and implementers have a shared responsibility to ensure that funding for health accomplishes maximum impact.” David Serwadda Makerere University School of Public Health, Kampala, Uganda “We have a moral imperative to ensure that every kwacha, dollar, rand, and rupee is wisely spent to save lives and change the course of epidemics. This report combines strong recommendations on improving health outcomes with practical consideration of the challenges that implementers face.” Stefano Bertozzi Dean of the School of Public Health at the University of California–Berkeley and former Director, HIV Program, Bill & Melinda Gates Foundation “Funds for health are scarce, so we have to deploy our money efficiently and effectively. This report on value Center for money tells us how we can do it. A must read for health leaders and funders.” William C. Hsiao Development Global for K.T. Li Chair Professor of Economics, Harvard School of Public Health A Report of the Center for Global Development Working Group on Value for Money in Global Health ISBN 978-1-933286-80-8 Amanda Glassman, chair, with Victoria Fan and Mead Over For an electronic version of this book, visit www.cgdev.org CENTER FOR GLOBAL DEVELOPMENT More Health for the Money Putting Incentives to Work for the Global Fund and Its Partners A Report of the Center for Global Development Working Group on Value for Money in Global Health Amanda Glassman, chair, with Victoria Fan and Mead Over c Center for Global Development. 2013. Some Rights Reserved. Creative Commons Attribution-NonCommercial 3.0 Center for Global Development 1800 Massachusetts Ave NW, Floor 3 Washington DC 20036 www.cgdev.org ISBN 978-1-933286-80-8 Editing, design, and production by Communications Development Incorporated, Washington, D.C., and Broadley Design, Bristol, UK Working Group on Value for Money in Global Health Working Group chair Josh Salomon, Harvard School of Public Health Amanda Glassman, Center for Global Development Nalinee Sangrujee, U.S. Centers for Disease Control and Prevention Working Group members Nina Schwalbe, GAVI Alliance David Barr, Pangaea Global Aids Foundation Bernard Schwartlander, Joint United Nations Programme on Joseph Brunet-Jailly, Institut de Recherche pour le HIV/AIDS Développement and Sciences-Po Paris David Serwadda, Makerere University School of Public Health Kalipso Chalkidou, National Institute for Health and Care Agnes Soucat, African Development Bank Excellence International Yot Teerawattananon, Health Intervention and Technology Karl Dehne, Joint United Nations Programme on HIV/AIDS Assessment Program in Thailand Alan Fairbank, Independent Damian Walker, Bill & Melinda Gates Foundation Victoria Fan, Center for Global Development Brenda Waning, UNITAID Kara Hanson, London School of Hygiene and Tropical David Wilson, World Bank Medicine Prashant Yadav, University of Michigan Iain Jones, U.K. Department for International Development Gavin Yamey, University of California, San Francisco Jason Lane, U.K. Department for International Development Bruno Meessen, Institute of Tropical Medicine Staff Mead Over, Center for Global Development Denizhan Duran, Center for Global Development Nancy Padian, Independent Kate McQueston, Center for Global Development Mark Rilling, U.S. Agency for International Development Rachel Silverman, Center for Global Development iv Table of contents Preface vii Acknowledgments viii Executive summary ix Chapter 1 The Global Fund and value for money 1 Why this Working Group? Why now? 2 Notes 4 Chapter 2 What is value for money? 5 Generating incentives for value for money: a framework for funders 6 Note 9 Chapter 3 Planning allocation 11 Overview 11 Opportunities and limitations 14 Recommendations 15 Summary 22 Notes 22 Chapter 4 Designing contracts 25 Overview 25 Opportunities and limitations 26 Recommendations 28 Summary 32 Notes 32 Chapter 5 Tracking and using cost and spending data 33 Overview 33 Opportunities and limitations 37 Recommendations 39 Summary 41 Notes 41 v T able of contentsable of Chapter 6 Verifying performance 43 Overview 43 Opportunities and limitations 46 Recommendations 48 Summary 49 Notes 50 Chapter 7 Conclusions 51 Reflect value for money in key performance indicators 51 Build better accountability with technical partners 52 Connect countries with scarce (but essential) expertise to inform allocation 52 Create synergies in data collection and analysis 53 Assess and share best practices among principal recipients, country coordinating mechanisms, and other partners 54 Wrapping up 54 Notes 55 Appendix 1 Sequencing and division of responsibility for the value for money agenda 57 Appendix 2 Innovations in the design of “contract-like” grant agreements 59 Appendix 3 Working Group on Value for Money for Global Health Funding Agencies 67 References 73 Boxes 1.1 Statement by African Ministers of Finance and Ministers of Health on value for money 2 1.2 Global Fund aspirations meet aid realities 3 1.3 Global Fund leadership and value for money 4 2.1 Definition of value for money and its components 5 2.2 Selected global health funders 7 3.1 Redirecting resources to hot spots of infection and transmission 18 3.2 Data requirements to optimize for impact 20 3.3 Modeling as a success 21 4.1 Statement by the Technical Evaluation Reference Group on performance-based financing 26 4.2 Comment on country coordinating mechanism incentive structure 27 4.3 Suggested core indicators for performance-based financing 29 4.4 Frequently asked questions about performance-based financing 30 4.5 Innovations in grant design can improve recipient efficiency and enhance the donor’s cost-effectiveness while economizing on information 31 4.6 Health Results Innovation Trust Fund–participating countries and Global Fund high-impact countries 31 5.1 The Price and Quality Reporting system 34 5.2 What determines the unit cost of a first-line antiretroviral drug? 35 vi Table of contents of Table 5.3 The U.S. Government Accountability Office on the Global Fund 36 5.4 Strengthening supply chains: a new initiative at GAVI Alliance 36 5.5 Perspective from Liberia 39 7.1 Excerpt from the new funding model 51 7.2 Indicative menu of services provided by the proposed Decision Support Network 53 7.3 Statement by Ambassador Eric Goosby 53 Figures 1 Value for money domains for global health funders x 1.1 Life-years saved for $1,000 of tuberculosis interventions 1 1.2 The new funding model (as of April 2013) 3 2.1 Value for money domains for global health funders 8 3.1 Misalignment between men who have sex with men’s share of disease burden and funding level 12 4.1 Grant performance does not predict disbursement levels 27 5.1 Variation in reported cost per patient-year for Ritonavir 100 milligrams, September 2010–April 2013 34 5.2 Trend in 25th, 50th, and 75th percentile per-patient unit prices for Efavirenz 200 milligrams 35 5.3 Heterogeneity in the unit cost of antiretroviral treatment across 45 Zambian facilities, 2009 37 5.4 PEPFAR expenditure analysis pilot in Mozambique, mean and range of non–antiretroviral unit spending per patient-year 37 5.5 Variation in cost per patient-year of HIV treatment in five African countries, 2012 38 6.1 Boy stands in front of insecticide-treated bed net used as soccer net in Wassini Island, Kenya 45 6.2 Approaches to assessing grant performance 46 A2.1 Efficiency-enhancing response of a recipient granted residual claimant status and paid the previous year’s average cost for every current year unit of output 61 A2.2 Maximum payment of donor to recipient under the two-part payment contract of table A2.1 64 Tables 1 Value for money: summary of domains, key problems, and recommendations xi 7.1 Value for money: summary of domains, key problems, and recommendations 52 A2.1 Worked example of payments for above-threshold output during a single year of a two-part price agreement 63 vii Preface The Global Fund to Fight AIDS, Tuberculosis and Malaria, set up ownership while making the Global Fund itself far more account- in 2002, was meant to implement a new model of financing aid, able to its own funders for ensuring, as the report title says, more under which it would eschew the usual donor bureaucracy and red health for the money. tape and simply provide financing to countries needing support for My colleagues at the Center for Global Development have expanded health programs. The idea was that priorities in fighting closely followed the Global Fund over the years, from Steven Rade- the three major diseases should be set at the country level by con- let’s working group for incoming leadership in 2006, to Nandini sortia of government, civil society actors, and health providers.